Global Market Barometer | General financial discussion | Discussion forum

I have to AGREE with you completely, Bill! I have always thought this was odd, and it has raised questions for me about the mantras of many so-called long-haul investors. It makes sense for day traders perhaps, but that is decidedly a risky business, very time-consuming, and a no-no for TFSAs.

Case in point is my rep at Meridian. He is a very nice fellow, generally honest, 31 years old, somewhat dazzled by the business he is in. He graduated from university in a subject completely unrelated to finance. He never misses an opportunity to tell me, "I'd like to see your money working harder for you".
In January, he was telling me about the great gains he'd made in 2019 with his own market investments. I said something like, "Good for you. Markets are at a ten-year high right now and we're ready for a downturn. Sell!" He then says "No, I'm in it for the long haul."
Well, guy, which is it? To my way of thinking, if you're going to brag about your gains, then you should be prepared to realize them; otherwise, they are nothing more than last month's statement and are not reliable. If you're in for the long haul, then the gains of late 2019 are nice but irrelevant and not worth talking about, let alone bragging about.
I have heard similar comments from similar people many times over the years. Only one of them ever told me I'd done the right thing by staying out of it - he was clearly licking his wounds. "Cash is king," said he, and it was true then. But now, not even cash is king. I envision significant inflation on the way and no help for interest rates. Batten down the hatches, everyone!
As for my Meridian rep, I haven't heard from him since January. We still have GICs there, at 3.75%, 3.5%, 3.25% and 2.7%. The lowest-paying one was shorter term and will mature in December. I doubt he'll have anything to offer that I want, but it's a registered account and I can wait until January. The problem is, the FIs don't want our money very badly right now.

Loonie said
I have to AGREE with you completely, Bill! I have always thought this was odd, and it has raised questions for me about the mantras of many so-called long-haul investors. It makes sense for day traders perhaps, but that is decidedly a risky business, very time-consuming, and a no-no for TFSAs.

Case in point is my rep at Meridian. He is a very nice fellow, generally honest, 31 years old, somewhat dazzled by the business he is in. He graduated from university in a subject completely unrelated to finance. He never misses an opportunity to tell me, "I'd like to see your money working harder for you".
In January, he was telling me about the great gains he'd made in 2019 with his own market investments. I said something like, "Good for you. Markets are at a ten-year high right now and we're ready for a downturn. Sell!" He then says "No, I'm in it for the long haul."
Well, guy, which is it? To my way of thinking, if you're going to brag about your gains, then you should be prepared to realize them; otherwise, they are nothing more than last month's statement and are not reliable. If you're in for the long haul, then the gains of late 2019 are nice but irrelevant and not worth talking about, let alone bragging about.
I have heard similar comments from similar people many times over the years. Only one of them ever told me I'd done the right thing by staying out of it - he was clearly licking his wounds. "Cash is king," said he, and it was true then. But now, not even cash is king. I envision significant inflation on the way and no help for interest rates. Batten down the hatches, everyone!
As for my Meridian rep, I haven't heard from him since January. We still have GICs there, at 3.75%, 3.5%, 3.25% and 2.7%. The lowest-paying one was shorter term and will mature in December. I doubt he'll have anything to offer that I want, but it's a registered account and I can wait until January. The problem is, the FIs don't want our money very badly right now.  

My shortest term matures in October @ 2.88%. My longest is @ 3.3%. They were competitive with other FI at the time.

Bill said
When I had most of my money in the markets I had blue-chip dividend payers that I kept for the long haul. But I also had other money, once I noticed my own choices usually did better than those I chose based on analysts', etc recommendations, that I used to get in and out of the market based on my own view of what was happening in the world in general. I was quite satisfied with my years in the market, both approaches, but the point I'm making is you can use conventional wisdom for some of your market investments, doesn't have to be for all of them.  

A long term for the markets is something like 10-12 years. After investing that long. Stop. The savings keep growing no matter what happens, if you are diversified across several sectors. You do not need to be invested in all sectors. I stopped years before the 2008 correction.

I have no quarrel with those who choose to get in to the stock market and decide to either go for the "long haul" or to dip in and out when they've made a profit.
I just think financial professionals should have a consistent attitude. If they advocate long haul, then they should shut up when there are short term gains. And if they are in it for short term, they should sell when they make a profit and admit it when they take a loss from which they do not expect to recover.

Loonie said
Seems to me that if my money was worth X last year, and now it's worth (X - 22 cents), then somebody ate my 22 cents. I blame inflation.
I agree it's minor, but it was significantly depressed by oil recently. Next and subsequent months should tell a different story.  

The cost was X last year. The cost is X - 22 cents this year. This is deflation. I am sure it is too small to notice this change from one month to the next. In Ontario our property taxes are deferred 3 months. I did not notice until no payment was withdrawn in April. I am not going to spend it. I will leave it there until it is paid in July. This is a significant drop in expenses. It will take until January 2021 for it to be reflected in inflation index properly.

The confusing comment was "$100 in 2019 is worth $99.78 now in 2020". In fact it now takes less to buy what cost $100 in 2019 so today's $100 is worth more than last year's $100. No big deal, easy to confuse.

Stats are bogus anyways.

Save2Retire@55 said

Interesting. I played the market in 2019 too but if you recall I posted here how I did it. I bought and waited couple months then sold it all in by early Dec before going for the vacation. Since then I have been waiting. I couldn't see any logical justification on the market going so crazy high. Didn't make any sense both for the US and Canada. So yeah I waited till the crash happened. I bought and kept buying till I sold it all about a week ago.

And me too. I exactly have all the rates you mentioned. I wish I had more money on the 3.75% one. But who knew. We were all waiting to see who will be the first offering 4%. Never again!  

Market volatility.
When we were younger we learned stocks provided better returns than fixed income. Everyone starts investing in equities at different ages. Assume fixed income is 3% over long term. Assume stocks return 5% over long term. Investor is 40 he buys for 10 years depositing $1,000 per year. How much does he have at 3% after 10 years. $11,807. How much does he have at 5% after 10 years? $13,206. He stops investing since he needs the money for other purposes. Another ten years passes. Time to retire. How much at 3%? $15,868. How much at 5%? $21,512. You have 35% more if you invest in stocks over a 20 year period. Add a market crash of 20%. You still have more. Too bad we NEVER knew this when we started out. Enjoy the summer.