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Out of the Market Almost A Year

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September 23, 2008 – Comments (3)

I pulled all my market investments last October/November with a plan that I would re-evaluate the market in a year.  It is getting close to that year. 

Right off the bat I am not even close to ready to re-enter the market at all...  I don't have time to watch my investments and althought things have gotten bad, I still think there is worse to come.  Huge losses have to be taken for this to fix itself. 

Right from the beginning I've stated my reluctance is that I don't feel that I can predict how things are going to unwind and what will be in the tsunami's path.  I expected pension to be hit, the wealthy to have no place to hide, tax increases and interest rate increases.  I didn't see something like Paulson's blank cheque request.

Canada is about 1-2 years behind the US in terms of seeing what declining home values do to our mortgages.  Our lending standards adhered a bit more to a standard of ability to pay back the loan.

But...

Canada has $121 billion pension fund invested in markets.  People who've been reading my blog know that I am very upset at the stupidity of chasing bubbles rather then paying down debt.  I still haven't seen any news on what kind of hit Canadians have taken.  So...  I am tending towards watching for a while longer...

3 Comments – Post Your Own

#1) On September 23, 2008 at 4:26 AM, DemonDoug (73.55) wrote:

PM yielding 4.2% and is likely to be one of the best growth stories of the next 10 if not 20 or 30 years, as long as you don't mind investing cigarettes.

I'm still more than 50% out of the market, but I've been adding money to my mutual funds in my 401k, with the idea that the markets are heading down over the next 12-24 months, and I'd rather be buying on the way down piece by piece (DCA'ing) as opposed to riding the markets up; however in both my retirement and taxable accounts overall I'm more than 50% in cash.

And I've got a lot of green thumbs on my CAPS page so you know I'm a bit more optimistic overall than you deb, but I can't fault you for your current strategy.

As far as the MOAB (mother of all bailouts), just wait and see what happens.  I think the American public is for once so far up in arms at the cost of this thing at their expense to guarantee Paulson and his Wall Street buddies their bonus checks, we might get a somewhat unexpected outcome out of all this.

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#2) On September 23, 2008 at 4:38 AM, ikkyu2 (99.15) wrote:

Doug: Bill Gates, Warren Buffett, and Mike Bloomberg have raised several hundred million dollars to dedicate to preventing cigarette sales in developing countries.  In other words they're going to take on PM, front and center, and try to take it down.  I sold my considerable stake yesterday, it was about 15% of my portfolio.

I think it's time to be in cash.  I also don't think dollar cost averaging is for people as smart as Doug and Deb.  Buy what's cheap; the market is only there as a reference to see if anyone is offering to do anything stupid.

And they will be.

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#3) On September 23, 2008 at 7:33 AM, TMFDeej (99.32) wrote:

Hi Dwot.  Your decision to get out of the markekt when you did certainly looks good now.  Not very many people can say that their stock portfolios are higher today than they were at this time last year.

I have a quick question for you.  Without getting too much into politics, do you think that the liberals have a chance at defeating Harper and the Conservatives in the upcoming Canadian election?  The only reason that I ask is Dion has vowed to replan Harper's absurd CANROY taxation decision, so I want to know if there is even a remote chance that this would happen.  Thanks for sharing your thoughts.

Deej 

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