Friday Free for All!

Its open topic time here. A few interesting stories I’ve noticed this week:

-Canadians juggling record debt loads
-Whisper sweet mortgages in her ear
Riverview could house 30,000
-IMF: Canadas banks face more trouble
-Bernanke: Economic outlook has worsened
-Homes in bubble regions still wildly over-valued
-30% of recent us buyers have negative equity
-Florida bank blacklists 191 condo developments

What are you seeing out there? Post your news, links and anecdotes here!

note: my recent work on the blog may have disrupted some user accounts. If you’re having trouble logging in please try re-registering. You can still take part in the blog discussion without registering if you prefer.

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nvgrl
nvgrl
12 years ago

PHN is a reputable fund. Might have to jump "ships".

Interesting info. Thanks!

Asun
Asun
12 years ago

Down with mutual funds and high MER. 🙂 ETF is the way to go. In fact, the short ETF has been a lot of fun the last couple months. You can check out SKF, SRS, FXP on US market.

bdk
bdk
12 years ago

Mohican I agree. They have an Overseas Equity fund and a U.S. fund which're pretty good, he could do 80% balanced, 10% overseas and 10% U.S. and then when the Canadian Market hits bottom switch some into the PHN Dividend income fund too.

Jay, If you are just starting with one single global fund, take a look a:

Mac Cundill Value Fund

Some sites worth using for research include:

http://www.morningstar.ca

http://www.globefund.ca

http://www.stockhouse.ca

jay
jay
12 years ago

Mohican,

Any advice on "good global funds".

-J

mohican
12 years ago

TD has some good index fund offerings. Their e-series has particularly low fees and they offer pre-constructed portfolios for people at different risk tolerance levels.

CIBC also has a low-fee balanced index fund.

The PH&N fund is really good. The only issue I see with that fund is the underexposure to global markets but one could shore that up with a couple good global funds.

bdk
bdk
12 years ago

Mold City, I was doing index funds too, but figured pPillips Hager North are the way to go. They have a Balanced fund which is a Morningstar Fund Pick and has an MER of .88 (versus 2% for comparable funds at RBC). You need $25,000 to open an account with them, or you can pay a financial planner an extra .5% with $5,000 down. Here's the opening paragraph from the morningstar.ca article " Low costs and an excellent team of managers make this fund a top pick. Even with the overabundance of balanced offerings, there are still only a handful of names that we would consider worthy of owning, and PH&N Balanced is definitely one of them. With rock-bottom fees and an excellent management team that attempts to add value with all facets of the port" http://www.morningstar.ca/globalhome/quicktakes/f… The market is… Read more »

Mold City
Mold City
12 years ago

A much more alarming statistic is that it is at 1/3 of what it was in 1990.

Damn! Is that true? Some of them must have had their networth thrashed in a crash like that. Does Japan have an old age pension to support their older citizens?

What are people doing with their RRSP contributions this year? I have a feeling we're going to be in for a rough ride in the markets, so is it a good time to be buying equities or index funds? I'm paying too much for MER on mutual funds and trying to pay closer attention to this stuff, so I started a topic in the forum to ask for ideas on this:

http://vancouvercondo.info/forum/viewtopic.php?f=

jesse
jesse
12 years ago

patriotz: details on what 10% down meant was never specified. Listen for what it's worth; inklings of anything negative in the MSM, regardless of the exact number, is maveric IMO.

patriotz
patriotz
12 years ago

Sure. Nominal price is simply the price in dollars. Real price is this price adjusted for inflation to some base date. The consumer price index is almost always used for this (real = nominal/CPI). That's just a convention, there is nothing magical about CPI.

Analysts (unnamed in the commentary) are apparently muttering of a 10% drop in Canadian prices this year.

What price? Median or average? It matters, because BC and Alberta RE is so expensive compared to the rest of the country. A correction to fundamentals in the West could drop the national average a lot all by itself.

But a 10% drop in the Canadian median would have to mean a significant drop in the non-bubble areas where most Canadians live.

Not Mathy
Not Mathy
12 years ago

Forgive the ignorant question, but can somebody please explain what the difference is between nominal and real prices?

jesse
jesse
12 years ago

A bearish commentary (Real Audio file!!!) on CBC's Biznet this morning. Analysts (unnamed in the commentary) are apparently muttering of a 10% drop in Canadian prices this year. This is one of the first openly and extremely bearish predictions of future and imminent Canadian RE troubles.

freako
freako
12 years ago

Agreed for Vancouver. Other cities experience “core rot” meaning sprawl occurs in lieu of densification. Yes, the underlying assumption is population AND economic growth. If the Nikkei 225 is an adequate proxy for the Japanese economy, the fact that the Nikkei is at the same level now as it was in 1985 A much more alarming statistic is that it is at 1/3 of what it was in 1990. I read somewhere that Vancouver house prices only recently attained the peak value that they had in the early 80s? How long did it take for those prices to return to their bubble peak price anyways? Real prices took 25 years almost to the day. That happened in 2006. Nominal prices, can't remember exactly, but much less, maybe 7 years. Don't forget that inflation was quite high then. Now it isn't.… Read more »

blueskies
blueskies
12 years ago

….and poster zero is just that!

krrish1
12 years ago

Michael Randallbard,

Micheal you can call it what ever but they will burn on slow pace and those are brand new so you can feel good unless their life come to an end.

krrish1
12 years ago

Evergreen,Andreas, you guys are unbeatable again great sense of humor while your opponents are trying to put infuance by force. Poster 1 does not know what is inflation and how does that work and with lack of math skill he forgot to put half of dozens zeros behind price plus he don't know average age of human life. Poster 2 was a blind bear jump to support without reading the fact. poster 3 is some what correct but absolutley wrong here. Freako (as poster 4)is absolutely right so poster no 2 and 3 disappear and poster 1 never returned back to say sorry to evergreen, Poster 5 Andreas is absolutely right because this is depend on buyers what does he/she keep in mind while buying a place for them self,our home is not a bussiness it is a place to… Read more »

Mold City
Mold City
12 years ago

From blueskies link above:

If the Nikkei 225 is an adequate proxy for the Japanese economy, the fact that the Nikkei is at the same level now as it was in 1985 is telling evidence of the troubles that the Japanese economy has had to slog through. It's also a telling counter-example for advocates of a government-stimulus package to save the economy. Japan tried the Keynesian remedy last decade, which may have helped keep things ticking over but did not turn the slump around.

This reminded me of something – I likely have this wrong, but didn't I read somewhere that Vancouver house prices only recently attained the peak value that they had in the early 80s? How long did it take for those prices to return to their bubble peak price anyways?

blueskies
blueskies
12 years ago

interesting read on credit deflation

http://tinyurl.com/25ckpr

As the extent of the now-collapsed subprime bubble continues to be revealed, there have been an increasing number of comparisons to the pre-Great-Depression 1920s.

patriotz
patriotz
12 years ago

If you view property as a place to live, you view it as an investment.

Specifically an income or "value" investment rather than a speculative or "growth" investment.

Ditto an investor who buys for cash flow.

Unfortunately in the popular lexicon "investment" has come to mean "speculative investment" only. I wonder how many people consider a GIC to be an investment (which of course it is).

Greater Fool Planet.

Andreas
Andreas
12 years ago

I don't view property as an investment I view it as a place to live.

Michael Randallbard
12 years ago

"While scientists don’t like it, a Simon Fraser University marketing professor is praising an advertising brochure circulating overseas for condos at B.C.’s Whistler and Big White ski resorts that claims they are “global warming resistant."

Global warming resistant? What does that mean? Do you mean to say that overseas investors won't be able to buy a condo in Hongcouver and have it burn down with them in it? Drat!

jesse
jesse
12 years ago

"Hence central low density should would be expected to appreciate faster than inflation."

Agreed for Vancouver. Other cities experience "core rot" meaning sprawl occurs in lieu of densification. Income stratification can also lead to faster appreciation in some areas (the location^3 adage).

evergreen
evergreen
12 years ago

I assume you have an interest in disseminating misinformation…Don’t let vested interest people like evergreen tell you otherwise! The bulls have become a little more subtle and stealthy at disseminating the bs haven’t they? Just because I voiced an opinion which you don’t agree with doesn’t make me a bull nor mean I have a vested interest in property or want to mislead people. We sure have different concepts of what it means to be bullish or bearish. For me, being a bull or bear refers to the time between now and maybe, the next few years. That’s the only meaningful way it’s used in financial circles. In my post, I only referred to a time 10-15 years from now. Even if I feel that property prices will be at a new high then (adjusted or unadjusted for inflation), logically… Read more »

krrish1
12 years ago

While scientists don't like it, a Simon Fraser University marketing professor is praising an advertising brochure circulating overseas for condos at B.C.'s Whistler and Big White ski resorts that claims they are "global warming resistant."
http://www.cbc.ca/consumer/story/2008/02/15/bc-sn

freako
freako
12 years ago

It depends on how you define things Freako. How about MEDIAN real estate will never outpace inflation in the long term.

That is a pretty meaningless number. What matters is apples to apples. People buy individual properties, not a median index. More specifically, LAND outpaces inflation, structures do not. Hence central low density should would be expected to appreciate faster than inflation. Condos wouldn't, but they have high yield in return. Well, high yield in more normal times.