About 60% in equities, with a slant toward small-cap value stocks (a la Fama/French research). Got hammered last Oct to March, but seem to have bounced right back.

Remaining 40% in cash. Cash still feels like a pretty comfortable hedge to me, because I'm anticipating significant deflation in house prices over 5 years. If I'm wrong about house prices, I'll shift the cash over to bonds.

Not too sexy, but it's edging me ever closer to financial independence. I am not persuaded by arguments which insist on home ownership as a necessary condition of financial independence, so I agree with the mood of many posters here.

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Hi Jim,

The most obvious indicator is the spread between the proposed transaction price and the market price. The larger the spread, the bigger the risk (on average!).

I try to think about the transaction. Does it make sense to everyone involved? The BCE deal is a clear-cut case where it made no sense to the buyers or to the lenders. That eliminated BCE from my purchase criteria.

You certainly have to take on risk with merger arbitrage. There are so many things that could go wrong, although each is very unlikely, taken together, there is serious risk. So I don't recommend it to anyone, but of course I do lots of stupid(?) things that I wouldn't recommend to someone else.

Some risk can be contained by spreading your bets around, risking a smallish proportion of one's money or by selling before the deal is consummated. I don't risk money that I could not afford to lose.

I don't use web sites, although I know they are out there for US plays that make targets easier to find. Scotiabank I hear gives advise for these things through their full service broker, but I am do-it-yourself guy.

-VB

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Rents are falling.

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If you can read that sentence — well, you're lucky. A recent study by the Canadian Council on Learning found that 41 per cent of Vancouver-area residents aged 16 and older have the capacity to deal only with simple, clear material involving uncomplicated tasks. And more than one-third of Metro Vancouver adults don't possess the literacy skills to understand a public bus schedule, read directions on a pill bottle or keep up with technological advances in the workplace.

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http://www.federalreserve.gov/newsevents/press/mo…

How can anyone read this and not laugh?

This is either the over view of a new financial paradigm or a hint that when they pull back on the spending you better be ready to stand on your own two feet.

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http://www.bctc.com/about_bctc/reports_performanc…

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I agree:

Condo buyers will likely be the most vulnerable in a downturn for a number of reasons. One of them is that they are on the cusp of affordability for most buyers.

Condos that have not had an engineering report tp determine the degree of leaking ( Note: ALL condos leak to some degree) should be avoided.

The best condo buys re: value are those that have gone through a proper restoration with a building envelope specialist , other than those that were built correctly to start.

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